Project Management for the 80's
Secret Ingredients for Blending American and Japanese Management Technology
PMC International Corporation
The project management (PM) concepts, tools, and techniques applied today, and being developed for future needs, are fundamentally not new or revolutionary in character. Computer technology, however, adds to sophistication in scheduling, cost control, and progress measurement in terms of accuracy, speed, and timeliness. It also has an impact on corporate thinking and action-taking.
A recent, notable realization concerns the human aspects of management and control faced by all industries and nations. Their impact is significant on international projects, generally undertaken by developing countries, where interactions among professionals and firms with varying backgrounds of cultures, technological attainments, and management approaches, present a real challenge. Among issues requiring sharp focus by PM practitioners are: organizational planning, top management support and interest in implementing new concepts and techniques, proper training and understanding of systems and procedures to ensure effective interfaces among all involved, identifying conflicts and resolving them, and establishing truly realistic goals for costs and schedules.
Giant industrialized nations like the United States and Japan are, in fact, reexamining basic issues of corporate management philosophy, style, strategy, structure,-skills, etc. that affect workers’ motivation, morale, team spirit, productivity, and promote interpersonal relationships. Developments in the behavioral and social sciences might prove to be more important than those in science and technology during the 80’s. This paper is an attempt to discern a message from what has been happening in the management field and its relevance to “project management” during this decade.
Managing the Unmanageable
Economists, sociologists, psychologists, political scientists, philosophers, physicists, literary men, and many outstanding managers have contributed to the boundless management literature available today. Various points of view (e.g., classical, behavioral, quantitative) have emerged. In addition to types of management (financial, business, project), styles of management (autocratic, democratic, laissez faire) have been recognized. Furthermore, management specialization (engineering, construction, hotel, utility, product, and data processing) is being sought. During the past two or three decades, however, the preoccupation with technological advancement and its effects on the environment and human life has caused some degree of neglect to the area of management.
Understanding professional management has now become as important as understanding construction plans, engineering specifications, and contract documents. The professional manager occupying a position on the organization chart of a successful business must possess several basic qualities as well as acquired ones; otherwise, he would not have reached that organizational level.
Alfred Marshall observed that the heads of great business organizations performed many functions similar to those peformed by the manager of a great land estate or of a college at Cambridge. He noted that the chief executives of these institutions might have different objectives (e.g., personal gratification, wealth, fame, or scholarship), but that reaching these ends would always require management. With effective management, an organization could carry on for generations. When that management disappears, the organization itself might disappear. And, have we not seen that happen frequently in the construction industry?
Effective professional management must then involve managing even the unmanageable. Today’s worker, often supported by his trade union or other labor organization, expects a lot more than in the past. The consumer or citizen at large using the goods, services, or facilities available to him, exerts stronger infleunce on their providers through legislation, or similar means, in order to attain quality, safety and economy. The media have an inescapable impact on people’s preferences formed by varying emphasis on coverage of national and international events, on advertising and publicity of ideas and opinions—things that affect our personal and social lives. Issues like productivity, foreign competition, application of computer technology, etc. have often tended to be unmanageable. Effective management is brought about by the resourceful individual (or team) through successful attempts at managing the unmanageable amidst a variety of influential factors.
In the context of managing the unmanageable, professional management and project management become synonymous!
Professional Management Awareness
Whether it is the management of a business corporation (which may simply be looked upon as a huge “project”), a program of several related projects, or an individual project, what is it that ensures success? Is it technological innovation, financial resources, or the latest management methodology, understanding of the market, knowledge of supply and demand and other aspects of economic theory and industry trends? Are all of these, and more, relevant?
Sophistication in today’s management has evolved over 50 years of history that has spawned the development and application of the behavioral sciences and the growing understanding of what influences workers’ needs and management’s action. With the advent of mass production, manufacturing, and natural resource exploration projects, the planning, executing, monitoring, and control aspects of management have become formalized, studied, taught, researched, modified, and improved. Autocratic types of supervision and demanding, uncompromising management behavior have suffered setbacks with the labor movement and legislation affirming the collective bargaining procedure. Has management methodology changed enough over the years to cope with such factors as instabilities in world politics and markets, unpredictable oil supplies and prices, changing labor attitudes and productivity, overcautious government regulations, and public concern regarding safety and environmental protection? Or, do these factors provide convenient excuses for ineffective management, especially as observed in the superprojects of the 1960’s and 1970’s?
The key to successful management probably lies in having a certain “professional management awareness” among the organizational leaders, in addition to their commonly acknowledged attributes and areas of competency. Such an awareness could stem from familiarization with current trends in management philosophy and practice and conceptual approaches like Maslow’s Hierarchy of Needs, McGregor’s Theory X&Y, Herzberg’s Motivation Theory, Blake and Mouton’s Managerial Grid, etc. Such an awareness would, in some cases, come from native, inborn resourcefulness and intuitive judgment, which blossoms through practical business experience reinforced by formal training in the use of tools and techniques for management and control.
Such a professional management outlook across the lower, middle, and top management levels could bind them in harmony with common understanding and concern over business realities. It is, however, not self-generated; it must come from forceful deliberation on the part of the corporate officers and managers who themselves achieve and continuously upgrade the awareness of pecularities, problems, and potentialities of business and project management.
The professional management approach requires established and well understood objectives, plans, procedures, tools, and reporting mechanisms, and that a professional, participative climate prevail whereby all senior and supervisory personnel feel responsible for the operation’s success. Such an approach, when applied to project management and control, helps us look to project control staff as trained specialists, with a quality of leadership and vision, technical expertise, the ability to coordinate and reconcile divergent opinions, personal ingenuity, dynamism, integrity and so on. In other words, we must take charge of projects and ultimately prove to be top management’s successors.
The Art of Management-Eastern versus Western Approaches
A landmark approach, the Seven S’s Model, has been developed by Richard Pascale and Anthony Athos following an extensive, comparative study of thirty-four American and Japanese firms on an industry-by-industry basis. Included were the automotive, light manufacturing, retailing, food processing, aircraft, transportation, and consumer and industrial electronics industries.
Western companies were found to be favoring three “hard” S’s: Strategy, Structure, and Systems. When an American manager has to make changes, he will usually reorganize “Structure”, introduce a new “Strategy” direction and impose a new control “System.” This emphasis produces an arid, lifeless, passive, cold world of management operations.
An organization breathes life through the four soft S’s: Staff, Skills, Style, and Superordinate Goals (or guiding concepts, opposite of “subordinate”). The tremendous success of Japanese companies comes through meticulous attention to these soft S’s, which “act as a lubricant in the organization machine to keep the hard S’s from grinding one another away.”
The authors identify three objectives of their book; these are carefully approached and ultimately met. First, having thus far discovered rather limited tools to make organizations work, we must fully utilize all of the tools available. Second, culture affects how problems of direction, coordination, and motivation are perceived and resolved; American culture and society have allowed “managerial blindspots” that need to be indentified. Third, outstanding U.S. firms do some important things differently; however, they keep them disguised to conform to conventional expectations in the industry.
The Art of Japanese Management attempts to point out that Japanese management techniques, contrary to popular belief, are not all culturally bound, but are in fact adaptations of American approaches and are already employed by some innovative and successful U.S. companies. Pascale and Athos suggest that American managers take the best of Eastern tradition and integrate it into their own style. The authors further examine the subtleties of Japanese management. Emphasized are the use of ambiguous and implicit communications instead of forced direction and coordinated interdependence, and human relationships instead of competitive individualism, based upon intuition as much as impersonal rationality. Creation of a managerial system embodying strengths of both cultures could bridge the cultural chasms. Honda Motor Company’s cofounder once observed, “Japanese and American management is 95% the same, and differs in all important respects.”
Japanese firms like Matsushita (Panasonic, Quasar, etc.) have developed a “company culture” with employees motivated to energetically and creatively pursue the organizational objectives. They have long paid attention to the development of human resources and the acquisition of skills by successors in management.
Japanese firms consider it their duty to look after each employee’s “total needs”—personal, social, and spiritual. In contrast to China or Japan, “separate” institutions evolved in Western society with independent spheres of influence: the church, the state, the corporation. The basic principles of Matsushita, blending this trinity into a single entity, are:
Basic Business Principles:
To recognize our responsibilities as industrialists, to promote the general welfare of society, and to devote ourselves to the further development of world culture.
Progress and development can be realized only through the combined efforts and cooperation of each member of our company. Each of us, therefore, shall keep this idea constantly in mind as we devote ourselves to the continuous improvement of our company.
The Seven “Spiritual” Values:
- National Service through Industry
- Harmony and Cooperation
- Struggle for Betterment
- Adjustment and Assimilation
Japanese success in managing people is rooted in assumptions fundamental to life. First, they accept ambiguity, uncertainty, and imperfection as given in organizational life. Second, they see themselves as far more interdependent. Pascale and Athos draw the conclusion that the “enemy” of the once highly reputed U.S. management know-how and practices is not the Japanese or the Germans, it is the limitation of our “managerial culture”. No quick fixing or introduction of uncoordinated parts will solve industrial problems. Once we have a better view of who we are and what our own part is in the problem, we can, through our pragmatic and proven effectiveness in addressing problems, meet the challenge. In fact, some of our best corporations already have.
Project Management Technology
The PM Process
A less philosophical and more practical approach to the composition of PM “technology” must be addressed next. If one surveys the PM literature and examines some of the related curricula in educational institutions, references are found to such topics as:
Organizational planning, matrix management, project and work authorization procedures, project team formation and staffing, project life cycles.
Work Breakdown Structure development in keeping with scope of projects, services performed and contracted, and cost accounting requirements. Establishing a project management system, procedures, training program.
Baseline planning, determining the logical sequence of activities, and preparing an activity network model.
Estimating and budgeting resources required; CPM scheduling and allocation of available resources.
Contract management, purchasing, extra work orders, change orders, and claims settlement. Monitoring, measuring, reporting progress; analyzing project status; earned value performance measurement criteria.
Conflict management; leadership styles; management skills, motivation and morale. Personnel administration, labor union negotiations, customer services, public relations.
Any discussion on these topics is, of course, beyond the scope of this article. However, their identification serves the purpose of delineating the PM process to some degree.
Project Management in Recent Years
Another way to examine the PM technology scenario is to review two recent publications of the Project Management Institute (PMI). Edited by John R. Adams and Nicki Kirchof, the book, A Decade of Project Management, presents a selection of articles from PMI’s journal, Project Management Quarterly. These articles provide a broad review by both academicians and practitioners specializing in PM. In as much as they provide a representation of views on the major concerns which have motivated authorship, the book represents an anthology of thinking in the PM field during the 1970’s. Notably, the articles (and quantities) are organized by the following subject categories:
PMI: Role and Potential (5)
PM Defined: Definitions, Limitations, Philosophy (5)
Role of the Project Manager (10)
Managing the Human Resources in PM (6)
Organizational Methods for PM: Project, Systems, Matrix (7)
Networking and Quantitative Management Techniques (Theoretical Development, Specific Programs and Specialized Applications) (17)
Managing the Project: Managerial Strategies, Policies, and Techniques (General, Construction, Industry, Government) (22)
PM in Action: Case Studies (7)
Figures in parentheses, reflecting the number of articles in each category, suggest the extent of concern. I am convinced the next ten years will continue to show interest in the “Managing the Project” category with a new dominating subcategory of “International Projects.” The “Networking” category, somewhat oversubscribed in the past, will experience diminishing returns, whereas “Managing the Human Resources” might dictate greater attention. The discussion on Case Studies may also become popular. The “Role of the Project Manager” will be known to people by heart; the project manager’s skills and capabilities will have a broadened base and his specialty as a generalist will have better understanding and acceptance in business. The first category, on PMI, is indicative of the role and potential professional societies have in providing a forum for exchange of views and experiences and defining and refining the state-of-the-art. Expectations of organizations like PMI will increase, particularly in the areas of establishing standards for educating, qualifying, certifying, and/or recognizing PM personnel.
The second representative set of writings can be found in PMI’s The Implementation of Project Management: The Professional’s Handbook, edited by Dr. Linn Stuckenbruck. Aside from the Introduction, this book has twelve chapters prepared by PM experts with divergent industrial or academic backgrounds. Their discussions provide another clue to what is important to PM:
- The Need for PM
- Planning for PM
- Implementation of the Project: Getting Off on the Right Foot
- Organizing for PM
- The Matrix Organization
- Project Planning
- Tools of PM
- The Job of the Project Manager: Systems Integration
- The Use of Management by Objectives in PM
- Keeping Your Bosses Happy While Implementing PM — A Management View
- PM: How Much is Enough?
- The Implementation of PM: Three Case Histories
Appendices are provided on the following:
A. Corporate Policy Statement — Project Charter
B. Work Breakdown Structure
C. Project Master Schedule
D. Project Authorizations & Agreements Schedule
E. Project Materials & Equipment Forecast
F. Project Cross-Impact Matrix
G. Project Organization Charts
H. Project Documents Matrix
These publications are just the beginning for PMI in compiling selected current writings; they are neither comprehensive nor conclusive in any way. Book series related to PM are also planned by major publishers such as McGraw-Hill.2 Numerous seminars, workshops, and continuing education courses are offered by educational and commercial management consultants. Attention is also being given to specific needs in such industries as power, process and petrochemical, government projects, and data processing. Project management symposia are held worldwide. Professional bodies are formed for PM related activities in many countries (e.g., Australia, Brazil, England, Finland, India, Japan, Netherlands, South Africa, Norway, and Sweden). These encouraging trends are bound to continue with increasing enthusiasm during the 1980’s. The needs for cooperative international ventures will lead us into extensive and frequent studies and exchanges of successful PM methodologies and experiences among the nations of the world.
The “matrix management” mode for projects provides for the formation of a project team which has dual reporting responsibility. Having been “matrixed out” to a project by functional managers to serve the project needs, team members report to functional management and project management for technical and administrative purposes. The 1980’s should solidify the matrix management concept so that the functional, corporate, and project management concerns will become more integrated. These concerns, indeed, will constitute the methodology for managing project-oriented organizations. They may fall into the five following areas:
1. Organizational Planning
A company’s organizational needs change and functional regrouping becomes a necessity so as to:
Improve marketability of services; match with competitor’s strategies.
Explore new business opportunities; expand capabilities.
Meet regulatory requirements; satisfy client preferences.
Make up for staff movements (resignations, retirements, reassignments); offer better growth potential for the deserving.
Introduce formal project management concepts; implement the matrix management approach.
The essential considerations of organizational planning for immediate or long-range goals include:
Reviewing current organizational structure for strengths and shortcomings.
Developing criteria for restructuring in keeping with corporate objectives, new or revised.
Preparing an outline of desired functions and their interfaces.
Establishing staffing requirements.
Selecting the most qualified functional managers.
Making provisions for future expansion and managerial succession.
These are frequently not developed formally, resulting in regrettable consequences. The far-reaching effects of a stagnant organizational structure are disastrous. Young, ambitious, and competent supervisory professionals feel stifled; many managers find themselves at a dead end, frustrated, and unable to exert any influence on company growth. Top management may also become helpless in satisfying changing client and industry demands. A company’s strength lies in unlocking the fullest potential of its people by steadily offering opportunities for career development through a dynamic, progressive, and flexible organizational future.
The project organization has a better chance to succeed when developed in harmony with the corporate structure and with participation by functional managers who have to ultimately provide support.
2. Operating Procedures
What makes the business life easy for company management at all levels is a clear definition of company business and a policy statement of goals and objectives, supplemented by simple operating procedures which provide guidelines for administering the policies and fulfilling business objectives.
The effectiveness of a well-planned organization lies in the manner in which:
Each functional unit is identified and described.
Lines of communication are established.
Delegation of authority and accountability are clarified.
Decision-making tools are furnished.
Various business-related situations are covered for routine handling as well as problem solving.
Peculiarities of engineering, construction, and project management are considered, if the company business is project-oriented.
Documents are traditionally prepared, maintained, and regularly updated or revised, depending upon the nature and size of business activity. For example:
Organizational Manuals containing organization charts, descriptions of functional responsibilities, sometimes personnel rosters.
Administrative, Employee Relations, or Personnel Management Procedures Manual containing procedures for time sheets, vacation and similar benefits, office services, expense accounts, field assignments, overseas work, etc.
Design/Engineering Related Manuals, such as Design/Drafting Standards and Guides, to be used with industry codes and regulatory guidelines.
Construction Management and Field Construction Procedures Manual to provide overall guidelines and technical directions for work intion, contract administration, etc.
Training Manuals and User Manuals for various information processing and reporting systems and associated procedures.
3. Management Systems
Engineering and construction, like other large scale businesses, require heavy computer usage. Payroll and accounting systems, structural frame or piping stress analysis, and cable routing are common commercial and technical applications of data processing. Management information and control systems are becoming vital also. Their usefulness is recognized in principle, but they have not been employed wholeheartedly in practice.
There was a time when people talked about a project management system and meant no more than a simple CPM scheduling system. Today, its scope has gone far beyond that. No one would become involved in sophisticated management systems if the following needs were not experienced:
A logical PLAN for the work.
An assurance of feasible SCHEDULE.
A realistic ESTIMATE OF RESOURCES.
A practical ALLOCATION OF RESOURCES.
A dependable CASH FLOW.
A meaningful STATUS REPORT.
It is more than a cliche that computers are oversold and underemployed. Nevertheless, the computer is indispensable when it is necessary:
To generate and carry massive data.
To process, manipulate, and sort data.
To facilitate integration and consistency of all relevant data.
To provide a variety of management reports.
To ensure timeliness, speed, and accuracy.
Objective, fully committed help in conjunction with a high-level company task force is often essential when it is necessary to:
Establish new system criteria and output needs.
Consider balanced combination of computerized and manual system components.
Provide for future expansion or consolidation of systems.
Review existing systems for enhancement in view of new organization conditions.
Select the most suitable of the available systems hardware and software.
Develop independent or integrated engineering, construction, project management systems as modules, dictated by circumstances.
Prepare user and training manuals.
Plan and pursue a system implementation, support service, and periodic review and upgrading program.
4. Status Review/Audit
The status of a given project or an organization’s operations can be determined by using initial operational criteria, planned end results or intermediate milestones, judging the overall flexibility and specific responsiveness to changing conditions, examining personnel attitudes, motivation and morale, comparing performance or market share with competitors, or similar considerations.
Effective implementation of an effective management information and reporting system becomes apparent in its contribution to the planning process, communication, psychological aspects of teamwork and cooperation, and corrective action on critical issues.
System review and/or management audits are at times commissiond by government regulatory agencies to evaluate the prudence or judgment exercised by the management of the organization being audited in making the technical or management decisions that influence the course of major projects. Organizations like public utilities might even initiate an internal audit with limited corporate or project objectives (e.g., evaluate the effectiveness of its computer services department in supporting projects, determine the percent completion status on a nuclear power plant project, or examine the cost-schedule impact of the contracting methods used or of the design changes resulting from new regulatory requirements and extra work orders and rework as a consequence of design changes).
Small-scale studies concerning the adequacy of existing systems and procedures or a review of a newly installed operating system for possible refinements, etc. have also proven necessary and helpful.
Such studies or audits require a team of experienced professionals who have on hand, practical, and detailed experience with the variety of technical and management aspects of the subject matter. Occasionally, the audit may be grave enough that it may require assembling high-ranking individuals from the industry rather than engaging a single firm of consultants or using an in-house task force.
In any event, third-party reviews/audits are proving to be a welcome approach to assure the sponsoring party objectivity and to lend credence to the findings.
The philosophy and practice of project management today are amply defined, refined, tested, and proven. However, they are not as well recognized and accepted as many of us would like to believe. Developing as a technology itself, PM now embodies concepts, tools, and techniques with universal management application to a wide range of industries and human endeavors during the coming years.
The initial emphasis of organization theory, followed by extraordinary computer applications, has experienced a shift in the area of PM training. The effective integration of technical know-how, the understanding of human nature, and leadership qualities that help project managers accomplish their goals, are recent.
A comprehensive training program in a company should address all levels of policy and decision-making. It may be implemented in parts or stages with improvements as necessary, until it can be put to full use. It may contain provisions for:
TOP MANAGEMENT, for the “state of the art” briefing on the current PM practices.
MIDDLE MANAGEMENT, for sufficient understanding of methods, systems, and procedures available in the market, developed within the company, and otherwise desirable to enforce; preparing to take charge of company business as tomorrow’s top management.
FIRST-LINE SUPERVISORS, for necessary close familiarity with the actual tools to be applied to live project conditions; developing managerial skills to move upward in an organization.
OPERATING LEVEL ENGINEERS, for in-depth working knowledge of project control concepts, specific system usage, progress measurements, reporting, and analysis techniques; building supervisory abilities.
NEW ENGINEERING GRADUATES, for appreciating the company’s modes of operations, multidisciplinary actions involved in project work, organizational interfaces, etc; selecting career paths.
Training programs, to be successful, have to be formulated after a careful needs analysis and goal setting with the appropriate people and correct time frame in mind.
The Seven S’s Model indicates that strategy, structure, and systems are becoming less significant for success relative to staff, skills, style, and superordinate goals. The 80’s will highlight the tendency for management to look after the total needs of the individual employee — personal, social, and spiritual.
PM for the 80’s will have professional management awareness as the theme and human aspects rather than technological ones, in sharp focus. Issues like trade unionism, consumerism, environmentalism, mass media’s influence, productivity, foreign competition, computer advancements, etc. will continue to be rather unmanageable — a challenge for the professional manager. Managing the unmanageable will be a common and frequent demand.
PMI’s recent publications highlight the PM topics and concerns during the 1970’s and provide a clue to future trends. The common concerns for functional, corporate, and project management will include organizational planning, operating procedures, management systems, status review/audit, and training.
1. Adams, J.R., & N.S. Kirchof, A Decade of Project Management, Project Management Institute, Drexel Hill, Pennsylvania, 1981.
2. Stuckenbruck, L.C., The Implementation of Project Management: The Professional’s Handbook, Project Management Institute, Drexel Hill, Pennsylvania, 1981.
3. Pascale, R.T., and A.G. Athos, The Art of Japanese Management, Simon & Shuster, New York, 1981.
1This article is based on presentations given to the Swedish Project Management Association (PROJECT PLAN) and the Project Management Association-India, in April, 1982.
2Editor’s note – Addison-Wesley Publishing Company, similarly, has planned project management publications.